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Foreign Affairs; Knight Is Right

Some things are true even though Phil Knight, the chairman of Nike, believes them.

Mr. Knight recently made news by suddenly withdrawing a contemplated $30 million gift to the University of Oregon after the university balked at joining a coalition -- the Fair Labor Association (F.L.A.) -- that was formed by human rights groups, colleges, the U.S. government and companies such as Nike to alleviate global sweatshop conditions. Oregon opted to join an alternative group being pushed on college campuses, the Worker Rights Consortium (W.R.C.), which also plans to combat sweatshops, but refuses to cooperate with any companies, such as Nike.

The natural assumption is that Mr. Knight is wrong. The truth is, Nike has a shameful past when it comes to tolerating sweatshops. But on the question of how best to remedy those conditions in the future -- which Nike has now agreed to do -- Mr. Knight is dead right and Oregon wrong: The best way to create global governance -- over issues from sweatshops to the environment -- when there is no global government is to build coalitions, in which enlightened companies, consumers and social activists work together to forge their own rules and enforcement mechanisms. That's what the F.L.A. represents and it's what the W.R.C. doesn't.

We've heard plenty this year about the downsides of globalization. The question is what to do about it. The more radical protesters, such as the W.R.C., want to trash multinationals and get the World Trade Organization to set rules for workers and the environment, not just for trade. And what practical effect have the protesters had so far? Zero.

So what to do? Well, it comes down to this: Do you want a make a point or do you want to make a difference? The F.L.A. was formed to make a difference. The W.R.C. was formed to make a point.

The F.L.A. was founded four years ago, and it now includes the Lawyers Committee for Human Rights, the National Council of Churches, the International Labor Rights Fund, 135 universities and major apparel companies such as Liz Claiborne, Levi Strauss, Nike, Reebok and Adidas. After long talks, this diverse group agreed on a nine-point code for any apparel factory anywhere in the world -- including rules against forced labor and child labor, as well as freedom of association, minimum wages, maximum working hours, lighting, bathrooms and safety. They also agreed on a system of independent monitoring, surprise inspections and follow-ups, which is now being tested in five developing countries.

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Companies whose factories comply will be able to sew an ''F.L.A.'' label into their clothing, and the 135 universities have agreed that their logos will go only on F.L.A.-made products. Global brands can't afford any longer to be associated with sweatshops, and the F.L.A. creates a credible system for empowering consumers to punish dirty companies and reward improving ones.

The W.R.C., by contrast, is backed by protectionist U.S. unions, such as Unite, that don't want any system that would give a stamp of approval to any production outside the U.S. That's one reason the W.R.C. won't work with companies. But that means the W.R.C. has no way of consistently monitoring factories or following up remedies, and it is only focused on clothing sold on college campuses.

It's good that there's a W.R.C. out there noisily protesting sweatshops and embarrassing companies. But the W.R.C. is not a substitute for the F.L.A., which has a comprehensive strategy for upgrading the whole apparel industry. It's a pity that some cowardly college presidents -- intimidated by a few vocal and often uninformed students -- have quit the F.L.A. in favor of the W.R.C.

''If you want to improve people's lives in the absence of a global government, you need to align the economic interests of the better global companies with the social interests of the least advantaged people,'' said Sam Brown, the 1960's antiwar activist, former U.S. ambassador and now director of the F.L.A. ''We need to make these companies our allies, not our opponents. We won't change the world overnight. But it is foolish to dismiss the F.L.A. because it does not go far enough or fast enough. The issue is how to get from here to there, and the F.L.A. has a real strategy for harnessing U.S. consumer power to change the lives and working conditions of real people.''